AirBnB : how to declare rental income

14 posts in this topic

Hi all,

 

I love this forum and all the great wisdom it provides, so I am asking you guys this new question.

 

This is not about the recent Berlin airbnb changes : I know those regulation and I would like to rent the extra room in the flat where I live, legally.

 

And while the question might sound silly, it's simply : how to declare that income, technically? 

 

I have been working employed and never did any tax declaration, never been to a steuerberater before (I did freelance with some invoices but was always below the taxing threshold).

 

Should I start doing tax declarations only to rent out a room?

Or is there a minimum threshold that if I stay within is tax free... ?

Or... ? 

 

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Thank you El, so should one submit that form to a steuerberater, send it to the tax authority at the end of the year, or.. ? 

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If you work with an accountant, you can either fill it out yourself or have the accountant do it, based on the info you provide.

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Thank you, do you know at which rate the income will be taxed (on top of Airbnb's fees) ? 

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Rental income in Germany is taxed progressively. That means that the rate depends on your total income. 

 

Taken from Wikipedia:

 

No income tax is charged on the basic allowance, which is €8,354 for unmarried persons and €16,708 for jointly assessed married couples. Beyond this threshold, the marginal tax rate increases linearly from 14% to 24% for a taxable income of €13,469 (€26,938 for married couples). In the subsequent interval up to a taxable income of €52,881 (€105,762 for married couples), the marginal tax rate increases linearly from 24% to 42%. The last change of rates occurs at a taxable income of €250,730 (€501,460 for married couples) when the marginal tax rate jumps from 42% to 45%. 

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Thank you Smaug.

 

I understand... Maybe :).

 

So basically that means that if my income is in X bracket, then all income from Airbnb will be taxed at X bracket's rate.

Unless, of course, Airbnb's income takes me to the next bracket, in which case it will be taxed at the higher percentage rate.

 

Is that correct? 

 

Also, can the fees be deducted?

 

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19 minutes ago, Smaug said:

Yes and yes.

 

Thank you so much!

Feel free to write me when you're in Berlin and beer is on me

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1 hour ago, El Jeffo said:

Where's mine? :lol:

 

LOL good point, I work near Alexanderplatz, gladly a lunch or beer after work :)

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What about MWST? There is a MWST registration threshold of 17.5K Euros, which most people would never exceed, unless they were renting an apartment professionally the whole year in an expensive area. However, as a freelancer I am already registered for MWST from my freelance income. If I rent out a room, should I charge MWST to AirBNB guests, or is the MWST part per income source which generates >17.5K Euros a year?

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On 10/6/2016, 2:51:10, lux7 said:

Thank you Smaug.

 

I understand... Maybe :).

 

So basically that means that if my income is in X bracket, then all income from Airbnb will be taxed at X bracket's rate.

Unless, of course, Airbnb's income takes me to the next bracket, in which case it will be taxed at the higher percentage rate.

 

Is that correct? 

 

Also, can the fees be deducted?

 

 

I would say it's worse than that. As far as I can work it out, around every 2.5K (I am sure someone knows the exact figure) in income increases the income tax rate by 1% on your TOTAL taxable income. So lets say you paid tax on 50K Euros (after personal allowances). One percent is 500 Euros. If I now earn 52501 Euros, then I get another 2.5K in gross income. However, that 1% addition on 50K is 500 Euros. Lets say the overall rate went from 29% to 30% (I make up the rates, as the actual depends on the figure you earn). That 2.5K increase costs me 30% of the 2.5K (750 Euros) plus an additional 500 Euros on the 50K I was already earning, some 1250 Euros in total. In effect my tax rate for that extra income is 50%.

 

Equally for deductions, which work in the other direction, a 2.5K deduction can result in a lower tax rate, overall, if it shifts you a 1% tax bracket.

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25 minutes ago, scook17 said:

What about MWST? There is a MWST registration threshold of 17.5K Euros, which most people would never exceed, unless they were renting an apartment professionally the whole year in an expensive area. However, as a freelancer I am already registered for MWST from my freelance income. If I rent out a room, should I charge MWST to AirBNB guests, or is the MWST part per income source which generates >17.5K Euros a year?

 

Actually, I found my answer here:

https://www.haufe.de/steuern/kanzlei-co/steuerliche-aspekte-der-kurzfristigen-untervermietung_170_207450.html

Answer: Yes, all business income is added together, so you exceed 17.5K and must charge 7% MWST in Germany, the same as the hotels do.

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